UNION GROVE, Wis. — Diesel has hit a record high. The national average for diesel reached $5.56 a gallon, compared to gas prices which are $4.41 a gallon. The high cost is impacting farmers. Dave Daniels from Mighty Grand Dairy in Union Grove says he needs diesel to power most of the equipment on the farm.
“We milk about 565 dairy cows. We also grow our younger animals, we have about 500 head of those,” said Daniels. “We do also harvest about 950 acres of crops and all those crops are fed to the dairy cows.”
Watch Daniels talk about how surging prices are affecting his dairy business:
Daniels says in a year, he uses 30,000 gallons of diesel. On Thursday in Wisconsin, the average price of diesel is $5.13.
“We have to pay that because we have to milk the cows and feed the cows. We are growing a crop this year that will continue to feed the cows through the winter, so we need to grow that crop,” Daniels.
Petroleum analyst at Gasbuddy.com, Patrick DeHaan, says the reason for the rising prices is a diesel shortage.
"Diesel inventories are at their lowest inventories in decades. There's certainly not enough refining capacity to meet demand, and so motorists are going to be hit,” said DeHaan.
For Daniels, the average cost for diesel has been on the rise.
His average cost per year:
- 2020: $1.15/gal
- 2021: $2.17/gal
- 2022: $3.79/gal
That means for every gallon of milk he produces, it is going to cost him an extra 3.5 cents. He says if consumers are seeing rising prices at the grocery store, it is not from these current diesel prices. He expects that is still to come.
“You are paying more for milk, I'm getting a little bit more for it, but I’m paying more for all the other things that make that gallon of milk. So in essence it is all trickling down, but no one is really winning because of our expenses,” said Daniels.